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Reorganising around the changing customer

Adapting to today’s sophisticated customer is challenging. Customers want simplicity, value for money and a seamless, responsive experience. However, enterprises are often complex and fragmented with multiple customer touchpoints, legacy systems and processes, and channel and data constraints. So, how do you stay ahead of informed buyers and disruptive competitors? How do you reset the organisational strategy and operating model to meet elevated customer expectations, working within the complexities of today’s enterprise?

During our recent Enterprise Growth Transformation summit, we unveiled our latest thinking around the five key shifts enterprises need to navigate when transforming to a customer centric digitally enabled sales marketing and service organisation. The first important shift we discussed was around customer strategy and the significant task of reorganising the business around the changing customer.

One of the fundamental challenges facing most enterprises is that of our customers evolving at a much quicker rate than the enterprise can. Customers are becoming increasingly tech-savvy and with a range of digital resources at their disposal - are now more sophisticated and discerning buyers. Customers want a simple path to purchase – one that offers a seamless experience across both physical and digital channels. They also expect value for money and responsive, efficient help on demand.

While enterprises might have the drive to become more customer-centric, the reality is that many are encumbered by complex organisational structures that involve multiple operational hand-offs. They are often fragmented and organised around legacy functional silos, as well as being constrained by a high cost to sell, serve and change. Legacy processes and technology and data constraints make the enterprise slow compared to the fast pace of customer evolution.

WHAT CUSTOMERS EXPECT VS WHERE ENTERPRISES ARE UP TO

To stay ahead of informed buyers and disruptive competitors, businesses need to fundamentally reorganise around the customer, resetting the organisational strategy, business model and operating model to meet elevated customer expectations. Businesses also need to realign segments, prioritise channels and reassess offers to value. Fundamentally, there are five important steps to implementing your customer strategy.

FIVE KEY STEPS TO IMPLEMENTING A CUSTOMER STRATEGY

1. Develop opportunity-based segmentation

Every industry, organisation and customer base are different. Yet, one thing remains constant - the segmentation you align behind must fit the context, be that in a B2B, B2C or B2B2C environment. Across multiple industries and clients, we've found certain dimensions critical for driving segmentation. The first is understanding who the customers are with the highest potential value. These are not always the obvious customers who may be doing a lot of business with you right now, but rather those who have a large wallet size and good growth potential in the future. Next, is understanding how the customer buys and uses your product.

Once you have applied your segmentation model, you’ll typically be left with a range of segments – this could be three, a handful or more. At one end - significant customers with complex needs and sophisticated demands who will underpin the economics of your organisation. These may be large supermarkets in a grocery context, or large corporate telecommunications or banking customer, or High Net Wealth customers in a consumer context. At the other end - a long tail of lower value customers that need to be worked at scale, such as small convenience stores for groceries, small to medium enterprises, small venues if you are selling to pubs and clubs or mass market consumers. In the middle - important segments where the value / volume trade-offs can be most effectively applied. Each of these segments will require a very different value proposition, product offer and go-to-market approach.

2. Customise offerings to high-value segments

In terms of product strategy, at the top end of the spectrum, you’ll need to design a bespoke offering to meet the complex and sophisticated needs of your strategic customers. As you move down into the territory of 'off the shelf ' bundles, at the mass market end of the spectrum, you'll need to create some form of mass customisation, at scale.

3. Prioritise channels based on value

Next, line up your marketing, sales and service channels based on customer value. Maximise resource effectiveness and minimise cost by aligning and dedicating your high-touch, expensive face-to-face channels with high-value segments. Lower value segments become the responsibility of centralised pooled resources, such as inside sales teams enabled with marketing automation. Digital self-service and fulfilment functionality are increasingly table stakes, and can support both models.

4. Align CX, content and campaigns to customer journey

The sophistication of your customer experience must match the needs of the buyer and customer journey. For strategic customers, there is usually a more complex purchasing process with multiple decision makers and regulatory overlays. For lower value customers, it is all about removing friction from an essentially simple purchase decision.

5. Self-fund the transition through resource alignment

The conventional wisdom around the shift in customer strategy is that it involves significant investment in both capital and operating expenditure. However, we have found that if you are really disciplined about lining up your expensive resources to your most valuable customers, significant savings can be redirected to new channels and technology, making the transformation self-funding to a point.

What's next?

​Legacy processes, data sources and technology platforms often restrict the ability of a business to cohesively support dynamic customer journeys. New digital channels have also exacerbated existing data and functional silos. In our next post, we look at how to overcome these challenges by leveraging the power of integration, digitisation and automation.